Social security guidelines issued
(China Daily)Updated: 2006-11-01 11:37
Figures from the Ministry of Labour and Social Security show that by the end of 2005, the total size of the nation's five social insurance funds pension, medical care, work-related injuries, unemployment and pregnancy funds had reached 696.8 billion yuan (US$87 billion).
"Prior to the scandal, which involves the misuse of more than 3 billion yuan (US$380 million) of the city's social security funds, Shanghai had been a model city in terms of management of the fund," Feng Jin, a researcher at Fudan University said yesterday.
"Shanghai has taken some bold steps in the management of the fund totalling roughly 10 billion yuan (US$1.2 billion), including the guideline issued on Monday," she added.
However, Wang Dewen, an analyst with Chinese Academy of Social Sciences, said yesterday that a special financial account cannot guarantee the money would not be misused.
"They could make up a false record that shows the money still exists on the account but secretly embezzle it," he said. "The way to fundamentally resolve the problem is to set up an effective monitoring mechanism and require transparent transaction procedures."
But he agreed that Shanghai is heading in the right direction and making positive changes.
According to Xiang Huaicheng, chairman of the National Social Security Fund Council, China's social security fund racked up investment income of 12.14 billion yuan (US$1.52 billion) in the first nine months of 2006, at a yield of 6 per cent.
Thanks to the bullish market in the first half of the year, stock investments contributed 50 per cent of the figure, he said.
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